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2 cards from this section. Quick, good the night before a test.
Define cost escalation in your own words.
Think about how economic changes affect pricing.
What is a price adjustment clause?
Consider what kind of situations would trigger a price change.
What does cost escalation refer to?
Think about when values change over time.
True or False: Price adjustment clauses ensure that any increase in costs can be adjusted in the contract.
Consider what clauses do in contracts regarding cost changes.
During a project, costs unexpectedly rise. Create a strategy on how to manage this escalation considering all stakeholders involved.
Think about what steps promote transparency and cooperation.
A cost escalation clause states that if material costs exceed a certain percentage, the contractor can request a price increase. If steel prices rise from $200 to $250 per ton representing a 25% increase, determine if this clause applies.
Use simple math to assess the percentage increase.
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